Council OKs deal with Herkenhoff; Melbye is lone vote against

Tuesday

Feb 26, 2013 at 1:33 PMFeb 26, 2013 at 1:35 PM

He wonders how much money the city will really save by not developing by CSC instead.

Mike Christopherson, Managing Editor

The Crookston City Council Monday evening approved a housing deal with developer Bob Herkenhoff involving 16 residential lots in his Nature's View Estates in Crookston's northeast corner, a deal made possible by the new Crookston Homestead Act.

At Large Council Member Wayne Melbye was the lone vote against the resolution. As he has previously, he questioned claims that the city will save a significant amount of money by working with Herkenhoff in favor of moving forward on residential development on land the city already owns north and northeast of Crookston Sports Center.

"I'm hearing from the community that we're back in the housing game now," Melbye said, in reference to the city's strategy over the past couple years to sort of sit back and let private developers take the housing lead. That approach has resulted in not enough new homes being built in Crookston, CHEDA Executive Director Craig Hoiseth and City Administrator Tony Chladek said in making the case of the Crookston Homestead Act that they've crafted.

As a result of Herkenhoff essentially gifting the lots to the city, the city will in turn be able to give the lots to buyers who agree to build homes within an as yet to be determined timeframe. The thinking, Hoiseth said, is that since the housing crash, would-be homeowners are having a more difficult time getting a mortgage approved. If they don’t have to come up with $15,000 to $20,000 for a lot, he said, it might improve their chances of getting the financing they need.

Still, Melbye said he's not convinced the deal with Herkenhoff is the way to go. "We take these donated lots, but with $252,000 in abatements over 15 years, it's not really a donation," he said. "Meanwhile, we have our own city lots across the road. I realize the utilities there are more expensive, but we're giving all these abatements instead."

The deal with Herkenhoff involves 16 lots along the east side of Barrette Street. He's also agreed to begin construction on three homes by the end of the year, one for personal use and two duplex-style residences. Utilities are already in the area, and extending them to the lots involved in the deal would cost a fraction of what it would cost to extend utilities to a new subdivision adjacent to the CSC, Mayor Dave Genereux said.

"It's a cost issue for us," he said. "With the proximity of those 16 lots to our current utilities, it's inexpensive, comparatively speaking."

The mayor acknowledged the city will "have to cross the road" eventually, but it's too expensive of a proposition to do now.

Ward 1 Council Member Tom Jorgens said the city has been looking for a way to partner with the private sector, and the first deal with Herkenhoff as part of the Crookston Homestead Act is a logical first step. If this "pilot program" works, Genereux added, there is the potential to do similar deals with other developers in other areas of the community.

Chladek stressed that the agreement with Herkenhoff is about "in-filling." In other words, it's about putting homes on lots that are largely ready to be built upon. "Doing this strategy that will get us up to 21 units carries a fraction of the cost of doing everything new...new roads, new curb and gutter, new utilities and everything else on the other side of Fisher Avenue," Chladek said. "If there's a message to send to the community, that's it. This is much more cost-effective."

Melbye isn't convinced. Within 18 months, he said, the city will likely be looking to the CSC property for more residential options.

A public hearing to discuss the abatements will take place at the council’s March 11 meeting. Next up is detailed discussions on exactly what will be required of those looking to build on the 16 lots, i.e. what convenants and other requirements will be put in place.

Wetlands Two weeks ago, the proximity of wetlands to the east of the 16 lots concerned several council members. Detailed checking through maps and GPS in the weeks since with the West Polk Soil and Water Conservation District has not only shown that the wetlands don't infringe on the 16 90 foot by 200 foot lots, but that development further to the east of the 16 lots might be possible. That would require the addition of at least one more street, however.

"Those are discussions we could have with Bob (Herkenhoff) later," Genereux said.

"It's his property, but it would be nice to have a second or third phase," Ward 3 Council Member Keith Mykleseth added.

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